On January 12, the US Supreme Court agreed to review the constitutionality of the SEC’s administrative law judges.
On November 29, 2017, the SEC did an abrupt about-face, telling the Court it now regards its ALJs as...more
In an Opinion highlighting the Circuit split over the constitutionality of SEC administrative law judges (“ALJs”), the Fifth Circuit recently stayed an FDIC civil-penalty and bar order against a Bank director, pending...more
On Monday, May 22, the SEC stayed all its administrative proceedings assigned to an ALJ in which a Respondent has an option for review by the 10th Circuit. (Securities laws provide appellate review of SEC administrative...more
The Tenth Circuit recently held that the SEC’s in-house judges are “inferior officers” hired in violation of Article II’s Appointment Clauses, creating a split with the D.C. Circuit over the issue.
The Tenth Circuit held...more
Having lost her initial suit (and appeal) to enjoin an SEC administrative enforcement action against her, the so-called “diva of distressed,” Lynn Tilton recently filed another lawsuit trying to halt her upcoming October 24...more
On August 24, the SEC announced settled administrative actions against 71 state and local issuers arising from $3.7 trillion in municipal securities offerings. The Commission alleged the issuers made false statements...more
9/6/2016
/ Administrative Proceedings ,
Cease and Desist Orders ,
Disclosure Requirements ,
Enforcement Actions ,
False Statements ,
Financial Markets ,
MCDC ,
Municipal Bonds ,
Municipal Securities Issuers ,
Municipal Securities Market ,
Sanctions ,
Securities and Exchange Commission (SEC)
The D.C. Circuit has affirmed that SEC ALJs are not constitutional Officers subject to the Appointments Clause, rejecting perhaps the strongest of the constitutional challenges to the Commission’s administrative forum. The...more
The Eleventh Circuit Friday joined three others in concluding that Congress intended Respondents must wait until appeal from the Commission to have a Court consider their challenges to the Constitutionality of the SEC’s...more
The Second Circuit has affirmed dismissal of “diva of distressed” Lynn Tilton’s constitutional challenge to the SEC’s administrative forum, holding that issue isn’t reviewable by the courts until an appeal after two levels of...more
In a January 21, 2016 Report of Investigation, the Inspector General for the Securities Exchange Commission found no evidence to substantiate allegations of pro-agency bias among SEC administrative law judges. The allegations...more
The SEC granted two petitions for review last week that tee-up significant issues for full Commission consideration late next Spring. The Commission will consider the application of the Second Circuit’s Newman decision...more
Five years after the SEC brought charges that cost two fund executives their jobs, the U.S. First Circuit overturned the sanctions, chiding the SEC for misreading critical evidence, lacking substantial evidence for its...more
Atlanta federal Judge Leigh Martin May enjoined the SEC from proceeding in yet another administrative enforcement action Tuesday. Ironridge Global IV, Ltd. v. SEC, No. 1:15-CV-2512 (USDC NDGA Nov. 17, 2015)....more
SEC Commissioners Piwowar and Gallagher dissented from a recent Commission Opinion sanctioning an investment adviser’s use of misleading historical data purporting to validate an asset-allocation model. Agreeing there was a...more
Laurie Bebo, CEO of Assisted Living Concepts, initially got some sympathetic words from the U.S. District Judge who felt constrained to turn away her constitutional challenge to the SEC’s administrative forum:
The Court...more
10/12/2015
/ Administrative Law Judge (ALJ) ,
Administrative Proceedings ,
Appointments Clause ,
Bebo v SEC ,
Disclosure ,
Due Process ,
Enforcement Actions ,
Equal Protection ,
Fraud ,
Publicly-Traded Companies ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Seventh Amendment
The battle over the constitutionality of the SEC’s administrative forum now moves to the U.S. Eleventh Circuit. The appellate court issued an order Wednesday, denying the SEC’s bid to upset the trial court’s preliminary...more
The citadel of the SEC’s administrative forum has been under assault from several vectors over the past year or so, as a chorus of dissenting Respondents have mounted increasing challenges to its constitutional legitimacy, as...more
10/5/2015
/ Administrative Law Judge (ALJ) ,
Administrative Proceedings ,
Article II ,
Bebo v SEC ,
Chamber of Commerce ,
Criminal Investigations ,
Due Process ,
Enforcement Actions ,
Fifth Amendment ,
Insider Trading ,
Non-Delegation Doctrine ,
Rules of Practice ,
Securities and Exchange Commission (SEC) ,
Transparency ,
White Collar Crimes
The SEC recently – and predictably – rejected a Respondents’ arguments challenging the constitutionality of the agency’s administrative forum. The September 17 Timbervest decision was the first of the constitutional...more
The SEC has announced a series of proposed changes to the Rules of Practice governing its internal enforcement actions. The changes update the decade-old Rules and respond in small part to a groundswell of criticism about the...more
Two rulings last week ordered the SEC to stop administrative proceedings in two cases, pending the Second Circuit’s ruling on the constitutionality of its administrative forum. The Second Circuit stayed the SEC’s prosecution...more